Bipartisan Spending Bill Promotes Drug-Price Transparency

Kerry Dooley Young

August 27, 2018

A bipartisan Senate duo used an annual spending bill to jumpstart a drive toward requiring the display of prices in direct-to-consumer (DTC) advertising for prescription drugs.

Sens. Richard J. Durbin (D-IL) and Charles E. Grassley (R-IA) won the backing of their colleagues for a bid to provide $1 million for the US Department of Health and Human Services (HHS) to issue a regulation requiring this pricing disclosure. Their amendment regarding DTC ads for drugs was included in an $856 billion appropriations package approved by the Senate on August 23.

The chamber voted 85-7 for this fiscal 2019 bill, which provides funding for the Departments of Defense, Education, and Labor, as well as HHS. The bill also would raise the annual budget of the National Institutes of Health (NIH) by $2 billion, or 5.4%, to $39.1 billion.

The DTC amendment represents a political win for groups seeking to rein in rising drug prices, even beyond securing $1 million — which Durbin described as "small change by any federal standard" — for HHS to write the regulations.

Senate leaders, including Durbin, had put a high value on passing this spending package to show that the chamber can handle its dozen annual spending laws in small batches, rather than hustling them through in enormous, unpopular omnibus appropriations. They rebuffed attempts by other senators to add amendments to the spending package that were deemed too politically divisive, such as one that Sen. Joe Manchin (D-WV) wanted to offer regarding preexisting medical conditions and insurance coverage.

But Republican and Democratic leaders allowed the DTC amendment to be added to the spending package. That decision may signal an increased willingness of lawmakers to stand firm against pressure from the pharmaceutical industry.

"It was about sending a clear message that we're all committed to tackling out-of-control drug prices together," Lauren Blair, a spokesperson for the Campaign for Sustainable Rx Pricing and a former staff member of the House Ways and Means Committee, told Medscape Medical News. "In today's marketplace, price is a significant factor patients consider when choosing the best treatment options, but it is all too often left out of the conversation."

The Trump administration already has completed at least a first draft of regulations for the Medicare and Medicaid programs related to drug pricing transparency. HHS submitted on August 21 a proposed rule on this subject to the White House's Office of Management and Budget (OMB) for review. OMB does last checks on regulations before they are put forward.

PhRMA Not a Fan

The Pharmaceutical Research and Manufacturers of America (PhRMA) already has raised objections to the idea of mandating disclosure of list prices in DTC ads. Complex negotiations involving insurers may mean the list prices have little relevance to patients. PhRMA also has said that there could be a First Amendment concern with such regulations, with the industry seeing this as a damper on free speech.

The Senate also still must work out a compromise version of the Defense-Labor-HHS spending bill with the House. That could present an opportunity for critics of the Durbin-Grassley amendment to try to strip the support for a DTC price-disclosure requirement from the package.

"The pharmaceutical industry hates this bill and this amendment like the devil hates holy water. They don't want to tell you what it is going to cost," Durbin said in a Senate floor speech. "We are trying our very best to give the American consumers a break and perhaps to start to slow down the cost of prescription drugs."

Durbin is the number 2 Democrat in the Senate, improving the odds for the DTC disclosure provision making it into law. And Grassley has battled with the pharmaceutical industry before. He's noted for a stubborn support of greater transparency — past successes to his credit include the creation of an open national database about payments to physicians from drugmakers.

Grassley said on the Senate floor that there's deep support for the "sensible approach" of demanding price transparency in drug ads.

Many physicians, insurers, and the AARP back this idea, Grassley said. He noted the odd-couple pairing of his working with Durbin on the amendment as further evidence of the breadth of this support. (Grassley, for instance, has a lifetime ranking of 84 from the American Conservative Union, whereas Durbin's is 4.5.)

"Think of what is behind this now," Grassley said. "How often do you get Senator Grassley and Senator Durbin cooperating on the same thing? Not too often. So that is something people ought to take into consideration."

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